Australia's GrainCorp Ltd on Thursday reported a loss for the first half of the year and scrapped its dividend for the period, as a severe drought across the country's east coast hit production and weighed on its business.
The country's largest-listed bulk grain handler, which had warned of an earnings hit last month, said underlying net loss after tax was A$48 million ($33.56 million) for the six months ended March 31, compared with a profit of A$36.1 million it reported last year.
Dry weather conditions have hampered GrainCorp's ability to generate revenue, with the company warning of a significant decline in grain production and minimal exportable surplus in eastern Australia in 2019.
“East coast Australian grain production was the lowest in over a decade and this has had a significant unfavourable impact on both our Grains and Oilseeds businesses", Chief Executive Officer Mark Palmquist said.
GrainCorp said it expects the challenging conditions in eastern Australia to continue in the second half.
The company has also been facing a slowdown in Chinese demand for barley as Beijing considers whether to introduce tariffs on Australian supplies, Reuters reported last month.
China late last year launched two probes into whether Australian barley suppliers dumped cheap imports into the market, and whether Canberra has subsidized sales.
GrainCorp, which is in the process of splitting itself into two businesses, said on Tuesday that asset manager Long-Term Asset Partners (LTAP) had withdrawn its A$2.4 billion ($1.7 billion) takeover bid after due diligence.
In its results announcement, the company said active engagement with parties that have expressed interest in its portfolio is ongoing.
The company did not declare a dividend for the half year, citing challenging conditions. It had paid 8 cents per share as interim dividend last year.
The Sydney-based firm said revenue from its malting business rose 14 percent to A$609.5 million, while revenue from its grains business rose nearly 47 percent to A$1.51 billion.
Total revenue for the period rose 25.5 percent to A$2.49 billion from A$1.99 billion last year.